ES Update

Today ES has achieved the major resistance target at 1983.25 that I pointed out in my last post. That line is particularly important because it is where the short-term range breakdown sell occurred back on January 7th.

To review…

We got the first major trendline break (short-term) at 2014.50 on January 4th. That was just below the Stops and Targets intermediate primary trend line at 2017.25, which was broken the same day.

The bottom of the (at that time) short-term range was broken on a close to the downside at 1983.25 on January 7th. That same day we got a break of the intermediate trendline support at 1959, which then targeted the bull stops under the bottom of the intermediate range at 1853.25 for the bears.

After a stop sweep/reversal under 1853.25 we got a new lower short-term pivot high at 1940, followed by a trip down to set a double bottom at an exact touch of the major bearish trend channel bottom rail at 1802.50 on February 11th. That double bottom was also a stop sweep/reversal under the long-term range bottom at 1814 and was a major long-term buy signal on Stops and Targets.

Since that buy signal, bears who missed the turn signal have been given no quarter, as expected, and here we are at major resistance, which is the initial target from that stop sweep/reversal off the 1802.50 bottom signal buy.

The recent price action perfectly follows the weekly bar paradigm pattern that has been in place since 2009. We will need another week of price action above the recent double bottom at 1802.50 to make it official, but as the chart shows above. Point 7, should it hold up, will be the wave four corollary of of its’ wave three counterpart at point 3. That is, a double bottom following a break of the last higher low that wasn’t immediately reversed (see yellow highlight ovals). Pretty cool, eh?

If the script remains the same, we could eventually see a push up to the top of the descending bearish channel followed by another tradable pullback and then ultimately a breakout to new highs for the wave five equivalent.

First things first though… and that means the market has to first negotiate the major resistance right here at 1983.25. We will see if the bears get a reprieve here for at least long enough to set a higher short-term pivot high–or if the squeeze will continue on a breakout above 1983.25.

If we do get a pullback, the next target lower would be VST stops under 1920.75. If the rally continues above 1983.25, the next target higher will be the original trendline break at 2014.50, which correlates with the Stops and Targets intermediate primary trendline at 2017.25